Vermont’s withholding tax tables for 2026 live in a Department of Taxes publication called GB-1210, and they work through a percentage method: from each employee’s gross pay you subtract the prorated value of their withholding allowances ($5,400 per allowance annually for 2026), then apply the resulting taxable amount to a four-tier bracket table that runs from 3.35% to 8.75% depending on filing status.1Vermont Department of Taxes. 2026 Income Tax Withholding Instructions, Tables, and Charts Any employer required to withhold federal income tax must also withhold Vermont tax from the same wages.2Vermont General Assembly. Vermont Code 32 – 5841 – Requirement and Rate of Withholding
What You Need Before You Run the Numbers
Start with a completed Form W-4VT for each employee. Vermont’s certificate is separate from the federal W-4 and captures the employee’s Vermont filing status, allowance count, and any extra amount they want withheld each period.3Vermont Department of Taxes. Instructions Employees in civil unions, or those who adjusted their federal W-4 in anticipation of credits, are especially likely to end up under-withheld without the state form.
If an employee never turns one in, you can fall back on their federal W-4, but the Department warns that route often withholds too little Vermont tax and leaves the worker with a bill at filing.3Vermont Department of Taxes. Instructions Best practice is to collect a W-4VT from every new hire alongside the federal form.4Vermont Department of Taxes. Withholding
You also need your payroll frequency. Annual allowance values and bracket thresholds are prorated to match weekly, biweekly, semimonthly, or monthly cycles.
How the 2026 Percentage Method Works
GB-1210 walks through the calculation step by step. Take gross wages for the pay period, subtract the prorated allowance value, and apply the result to the bracket table for the employee’s filing status.
Allowance Value
For 2026, one withholding allowance is worth $5,400 per year. Divide by your pay periods:
- Weekly (52 periods): about $103.85 per allowance
- Biweekly (26 periods): about $207.69 per allowance
An employee claiming three allowances on a biweekly payroll would have $623.08 subtracted from gross wages before you look up the bracket.
Tax Brackets and Rates
Vermont applies four rates in tiers, and the bracket thresholds shift slightly each year, so confirm the exact figures in the current GB-1210.1Vermont Department of Taxes. 2026 Income Tax Withholding Instructions, Tables, and Charts The 2025 table for a single filer or head of household breaks down like this:
- 3.35% on taxable income from $3,825 to $53,225
- 6.60% on the portion from $53,225 to $123,525, plus $1,654.90 base tax
- 7.60% on the portion from $123,525 to $253,525, plus $6,294.70 base tax
- 8.75% on everything above $253,525, plus $16,174.70 base tax
Married filers get wider brackets. In 2025, the 3.35% rate covered income from $11,475 to $93,975, and the 8.75% rate started above $315,475. The zero-bracket at the bottom of each table builds in the standard deduction, so employees earning below that threshold have nothing withheld.
To use the table, find the row where the employee’s taxable pay falls, take the flat base tax listed, and add the percentage of the excess over the lower end of that row. That total is the Vermont withholding for the period. Payroll software runs this automatically once you enter the allowance count and filing status from the W-4VT.
Bonuses and Other Supplemental Wages
When you pay a bonus, commission, or other supplemental wages separately from regular pay, Vermont allows a flat withholding rate in place of the full bracket calculation. The flat rate is 6.6% on supplemental payments up to $1 million and 11.1% on amounts above that threshold. You can also aggregate a bonus into regular pay and run the percentage method, but the flat rate is simpler for one-time payments.
Employees Who Claim Exempt
Some employees can write “Exempt” on the W-4VT and have no Vermont tax withheld. To qualify, the employee must have had no Vermont income tax liability the prior year and expect none in the current year.5Vermont Department of Taxes. Form W-4VT, Vermont Employee’s Withholding Allowance Certificate This usually applies to very low earners or students below the filing threshold. The exemption does not carry over, so anyone claiming it must submit a new W-4VT each year.
When to Remit What You Withhold
Withheld tax goes to the state through myVTax, the Department’s free electronic filing portal.6Vermont Department of Taxes. Create a myVTax Account Most employers are on a monthly schedule: tax collected during a given month is due by the 25th of the following month.4Vermont Department of Taxes. Withholding Employers whose total withholding exceeded $100,000 in the prior calendar year are required to file through myVTax and may face more frequent deposit requirements.
Every employer also files Form WHT-434, the Annual Withholding Reconciliation, by January 31 for the prior tax year, along with copies of all W-2s and 1099s. Employers issuing 10 or more W-2 or 1099 forms must file WHT-434 and the accompanying forms electronically.7Vermont Department of Taxes. Form WHT-434 Instructions
What Late or Wrong Withholding Costs
Vermont charges 5% per month on unpaid withholding tax, up to 25% of the amount owed, with interest accruing from the original due date. A separate 5% per month penalty applies if you fail to file a return at all.8Department of Taxes. Interest and Penalties The two penalties run independently, so an employer who both files late and pays late faces compounding charges. Calendar reminders for the 25th of each month and the January 31 WHT-434 deadline keep both off the books.